What happens when you reach your retirement age
When you retire, at age 55 or older, you’re allowed to take a maximum of one third as a cash lump sum (the cash lump sum is taxable) from your retirement annuity. The balance must be used to purchase an income annuity (the income annuity is taxable).
If the total amount in the fund is less than R247 500 you’re not limited to taking only one third of your savings as a lump sum. You can take the full amount as a cash lump sum, subject to tax.
Turning your savings into an income
Annuities convert your savings into income, you can choose between a living or guaranteed (life) annuity. As many as 80% of South African retirees choose a living annuity rather than a guaranteed annuity simply because it leaves them in control of their money.
There are two types of annuities that you can choose from:
Living Annuity
A living annuity is an investment product. You remain invested in the markets after retirement and retain some control over your savings. It is more flexible than a guaranteed annuity, allowing you to:
- Choose the assets you want to hold
- Choose the income you wish to draw every year within the regulatory limits
- Leave the remainder of your capital as inheritance for your nominated beneficiaries when you pass away.
- Switch service providers at a later stage
Life or guaranteed Annuity
This is an insurance product that pays you a specified monthly pension for life. You purchase this annuity from a life assurance company.
The full pension is paid until you die. You can read more on our blog post, choosing between a living annuity and a life annuity.
- Fixed income every month for the rest of your life
- Choose from over 7 different types of life annuities
- Your life annuity can not be inherited by beneficiaries
*10X currently doesn't offer any life annuity products.
Video: Building blocks to a lasting living annuity
Our recent webinar; Building Blocks to a Lasting Living Annuity generated a lot of interest from retirees, people who are thinking about retirement, and the investment community as a whole. You can view the transcript or key points covered in this blog post.
Keeping your fees low
Your capital is reduced not only by your drawdown, but also by fees. With 10X you pay 0% upfront fees, 0% advice fees 0% exit fees. Find out what your effective annual cost (EAC) will be here.
Calculate EAC
Based on a R 100,000.00 investment at 6% return over 40 years.
Get a free comparison
Do you know what you're really paying for your investment? Most people don't.
We'll show you exactly what you're paying now, and how much you could save by switching to 10X. We will compare your current Retirement Annuity, Preservation Fund or Living Annuity to 10X, showing you the difference in fees and performance.
Get a free comparison
Based on findings from the 2023 Brand Atlas Survey.
How to choose the right funds to invest in
As you near retirement, preserving your wealth becomes a priority. To achieve this, consider shifting your investment strategy towards stability. By increasing your allocation to defensive assets such as bonds and cash, you can help protect your savings from market volatility and create a more reliable income stream for your retirement year
10X Your Future Fund
The 10X Your Future Fund is a cost-effective, multi-asset high equity fund designed to maximise long-term capital growth for investors with a time horizon of 5 years or more.
Annualised returns:
11.4%
Asset class
Multi Asset
Local exposure
65.4%
Offshore exposure
34.6%
10X MSCI World Index Feeder Fund
The 10X MSCI World Index Feeder Fund offers investors 100% offshore exposure and long-term capital growth.
Annualised returns:
15.4%
Asset class
Equity
Local exposure
0%
Offshore exposure
100%
10X International High Equity
The 10X International High Equity Fund offers investors long-term capital growth with over 70% offshore exposure.
Annualised returns:
12.3%
Asset class
Equity
Local exposure
27%
Offshore exposure
73%
Build a lasting retirement income
You decide how you want to receive your income payments. Herein lies a key benefit of living annuities. You have the flexibility to adjust your income withdrawals, between 2.5% and 17.5% of your fund capital. You can choose whether you’d like to receive your income payments monthly, quarterly, semi-annually or annually.
Use our living annuity calculator to map out your sustainable income goal based on your current savings and projected retirement age
Tax implications after retirement
You do not pay tax on the amount transferred from your retirement fund to a living annuity. You also do not pay tax on the investment return you earn in your living annuity(capital growth, interest and dividends). However, your annuity income, including any cash lump sum commuted by you, will be taxed according the prevailing income tax tables.Your income is paid out net of this tax
Income tax calculator
